Oil loses fight to stay above $50 as investors weigh Opec meeting
Oil lost its fight to stay above $50 today, as investors reacted to a closely-watched meeting of the Organisation of Petroleum Exporting Countries (Opec).
Brent crude, the global benchmark, fell 0.3 per cent to $49.90 per barrel today, having broke through the $50 threshold earlier. West Texas Intermediate, the US benchmark, also slumped 0.3 per cent to $49.
Read more: Iran is playing hardball with Saudi Arabia over oil production cap
Opec failed to agree a formal output ceiling in Vienna sending the black stuff lower yesterday, however sentiment brightened as the cartel's de facto leader Saudi Arabia promised not to flood already oversupplied oil markets.
"The meeting removed a substantial concern and downside risk from the market as Saudi Arabia made it very clear that they have no intention of swamping the market with oil as a means of hurting Iran economically through a lower oil price," Bjarne Schieldrop, chief commodities analyst with SEB Bank, said.
Analysts said ahead of the meeting that stronger Opec members such as Saudi Arabia had less incentive to freeze or cut output because oil prices have rebounded from a multi-year low of below $28 per barrel in January.
Read more: What Saudi Arabia's new economic vision means for Opec's June meeting
Crude has been supported recently by supply outages in countries across the world, including Nigeria, Venezuela, Libya and the US. Earlier today militants said they'd launched attacks on two oil pipelines in the Niger Delta.
Government data released yesterday showed US weekly crude oil inventories hit 1.4m barrels, the third weekly decline in a row, another sign that the market is rebalancing.
